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Enders Analysis provides a subscription research service covering the media, entertainment, mobile and fixed telecommunications industries in Europe, with a special focus on new technologies and media. We cover all sides of the market, from consumers and leading companies (e.g. Vodafone, ITV, BT, Sky, Virgin Media, Apple, Google and others), to regulation. A complete list of our research can be found here.

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Enders News

Deadline 13 December 2017

Alice Enders was quoted in an article on the impending acquisition by Disney of Fox assets, which is believed to have major international implications. There are a handful of key areas of interest, including the creation of an international box office behemoth (and its concentration of power); and the face-off between a Disney/Fox OTT service and current global leader Netflix. In fact, earlier this year Disney was pulling its movies from Netflix beginning in 2019 and will launch its own ad-free, direct-to-consumer platform by late that year. However, Disney would not be entirely new to the offshore streaming party. It launched its Disney Life OTT service for kids in the UK in late 2015. Alice said it’s “not doing as well as Netflix because it’s a different proposition. What’s missing for Disney Life is the adult piece” which Fox would bring. She contends, “Disney doesn’t need Fox, it needs its assets for a credible OTT offering”.

Videonet 11 December 2017

Gill Hind was quoted in an article on how the premium video marketplace will evolve over the next few years. Gill highlighted what she believes is a dramatic decline in under-24s watching TV, said online SVOD giants like Netflix and Amazon are creating audiences for global content, and that they will dominate commissioning for super-premium content with international appeal. To complete the list of bad news, only 60% of all video viewing by under-24s will be captured by existing broadcasters by 2026, she said. The good news is that 80% of all video viewing in 2026, across the population as a whole, will be with today’s broadcasters. Most people will continue to get their localised content – which accounts for the vast majority of viewing – from these broadcasters. Hind concluded that the online giants are not going to compete with public service broadcasters in the UK, at least, and that their content will prove to be complementary and not substitutional. “The death of TV is clearly exaggerated,” she told the London audience.

Bloomberg 7 December 2017

Claire Enders was quoted in an article on the Fox-Disney deal. Disney, the world’s largest entertainment company, is in talks to buy Fox assets in a deal that could approach $50 billion or more. Besides, James Murdoch, Fox’s chief executive officer, could move to Disney if offered a senior role there after a deal. That possibility evokes strong responses from admirers and detractors of the Murdochs and their reign over the Fox media empire. Claire said “there is no doubt Bob Iger admires James, and Disney’s single biggest international relationship is with Sky”.

The Drum 7 December 2017

Matti Littunen was quoted in an article on YouTube’s ongoing brand safety issues, which have thrust the media industry into crisis. In response to growing concerns around damaging ad placements, brands have been taking greater control over the way their inventory and demanding greater transparency from their partners, calling the role of the media agency into question. In fact, it seems that agencies have been bearing the brunt of the issues versus Google itself, which has seen little effect on its bottom line this year despite a number of high profile brands claiming to pull spend. Matti believes there's a shortage of brands "voting with their wallets", backed up by Google's claim that the scale of the issue it has had on YouTube was "relatively contained" throughout the year. He added that this race to the bottom is "begging for trouble", as it essentially opens brands up to fraud and bad ad placement.

BBC 4 December 2017

Claire Enders was quoted in an article on Rupert Murdoch's 21st Century Fox which is reported to have resumed talks with Walt Disney over a sale of "most" of its business, including its Sky stake. Negotiations are said to include Fox's movie and cable networks and international divisions, including Sky. The rest of the group, which includes Fox News Channel, Fox broadcast network and its sports rights, are not believed to be up for sale. Claire said that the reported interest of Disney in Fox was "very credible". She said for a "huge conglomerate" like Disney, a deal focused on consolidation would be "very sensible", and allow it to save hundreds of millions of dollars though "combined efficiencies". But she said the talks would not be able to progress significantly ahead of a critical auction of UK Premier League rights early next year, which would potentially affect Sky's valuation.

Financial Times 4 December 2017

Claire Enders was quoted in an article on BT, which is heading into a critical auction of UK Premier League rights. The British telecoms group’s chief executive Gavin Patterson, is already raising the prospect of losing BT’s rights to Premier League games. He said the group’s ambition was to retain its position as a “strong number two” behind Sky in pay-TV sports. Claire said “These two companies have bid to kill and — if not that — fatally wound each other, and this behaviour has been visible in every major auction since 2012 and continues to this day”.

the Guardian 4 December 2017

Tom Harrington was quoted in an article on ITV, which is standing by The X Factor despite the current series of the singing competition delivering its lowest ever viewing figures. Bosses at ITV and Simon Cowell, whose entertainment company Syco is behind The X Factor, are understood to be pleased with the number of younger viewers that the show has attracted and the impact the acts have had in the iTunes download chart. Tom said that The X Factor’s overnight TV audience was down 22% on last year – when an average of 7 million people watch the final and that ITV would be “ruminating” about its performance. He added “When you consider that ITV don’t own the format, that they have The Voice coming to the channel from the BBC this year, which it does make, then X Factor starts to look expendable. ITV will be thinking that they can do better”.

The Independent 29 November 2017

Alice Enders was quoted in an article on Donald Trump’s attacks on CNN, which helped their revenues far more than his praise helped Fox News. Despite the President constantly tweeting his love of Fox News, the right-wing, unashamedly pro-Trump network suffered a 2 per cent drop in advertising revenue. Meanwhile The New York Times, the newspaper Mr Trump calls “failing” and “enemy of the people”, has announced it is gaining 100,000 subscribers a quarter, up from the pre-election growth rate of 23,000-33,000 new subscribers a quarter. Alice told The Independent: “These figures suggest the so-called ‘Trump bump’ is helping the media he attacks more than Fox News”. She explained that most media – whether leaning to the left or right – had grown thanks to the massive appetite for news generated by the 2016 election and Mr Trump’s hectic, drama-filled presidency. But Ms Enders said the Fox figures – the first year-on-year decrease in one of the big three US cable news networks since the 2016 election – might mean that the media outlets Mr Trump attacks are the ones benefiting the most. One potential reason for this, said Alice, was that in launching constant attacks on the “fake news” media, “Mr Trump is also giving an awful lot of free publicity to CNN. He’s effectively advertising CNN to people who don’t like Trump – and let’s not forget his approval ratings are incredibly low and have been declining. “In turn, the appeal of these news channels to advertisers is driven first and foremost by [the size of] their audiences.”

the Guardian 22 November 2017

Tom Harrington was quoted in an article on Amazon's $1bn bet on Lord of the Rings, which shows the scale of its TV ambition. However, Amazon must navigate its losses against a backdrop of below-par performance at its streaming business, where there have been too many multimillion-dollar failures. Consequently, Jeff Bezos, the company’s founder, announced a deal to make Lord of the Rings into a TV series. The mooted $1bn (£755m) cost – $250m for the rights, $750m to film six series, making it the most expensive TV show ever – illustrates the scale of Amazon’s ambition and Bezos’s growing frustration with the TV business. Tom said “buying Lord of The Rings is completely against their previous strategy. They are trying to buy their way out of their difficulties”.

Reuters 20 November 2017

Francois Godard was quoted in an article on Altice’s shares, which have fallen 12 percent on Friday. On Monday, Patrick Drahi, Altice’s founder, said that Altice would shift away from acquisitions towards debt reduction and customer satisfaction, but concerns that Altice may need to raise cash hit its shares. Francois said that while Altice’s update might reassure bondholders in the short-term, in the longer run the company still needed to improve its underlying performance in France. He added “bondholders will be more comfortable once they see that the French operational performance is getting better”.

Financial Times 20 November 2017

Francois Godard was quoted in an article on Altice’s shares, which have almost halved in the past few weeks after poor third-quarter results were compounded by worries over its high levels of debt. In 2014, Altice acquired SFR, which still accounts for almost half of its revenues. This deal making has left Altice saddled with about €51bn of debt, much larger than the company’s €15bn market capitalisation and more than five times its earnings before interest, taxes, amortisation and depreciation. Investors want to see that Altice can manage the businesses that it has expensively assembled — particularly in France, its largest market. Francois said “besides sustaining network deployments, to turn around SFR, Altice needs to abandon short-term fixes, invest in its workforce and customer service and differentiate through valuable innovation — in other words the opposite of the model followed so far”.

OpenDemocracy 17 November 2017

Alice Enders was quoted in an article on the Sky/Fox bid. This week, the CMA has published a transcript of its first “expert round table” on the bid: that on media plurality (another on broadcasting standards will follow shortly). The review by the Competition and Markets Authority (the UK’s senior competition regulator) is what is known as stage 2 of the inquiry into this proposed merger, triggered by Karen Bradley, in September, after several months of scrutiny by the media regulator, Ofcom, whose inquiry was requested by Bradley, using her powers under the 2002 Act – media plurality being the only part of competition oversight of UK transactions of this size not reserved for the EU authorities. During the first expert round table Stewart Purvis, offered his own “theory of Murdoch”: the establishment of a right-of-centre broadsheet newspaper, alongside a raucous popular tabloid and an opinionated news channel – a pattern he identified in the US and in Australia, and now potentially in the UK. Alice gently deflated this conceit, pointing out that Sky in the UK is a family-friendly platform business, very different from Fox News in the US, which is primarily dependent on advertising revenue.

Wired 15 November 2017

Joseph Evans was quoted in an article on Uber, who had seemingly struck a deal with an investment group led in part by Japan's SoftBank. The deal, which would have seen SoftBank take a stake in Uber, seemed all-but-confirmed. Joseph said that this initial failure to secure investment is troubling for the company. He added “Uber being unable to lock down some of the easiest money in the world right now is a very worrying sign.”

TVBEurope 14 November 2017

Tom Harrington was quoted in an article on the Amazon/Lord of the Rings deal. Tom told TVBEurope Amazon's reported $250 million deal to secure the rights to JRR Tolkien's Lord of the Rings will not be the last time a streaming service will win out over traditional TV. He said "the traditional broadcasters are already worried in terms of these large super-premium productions because they can’t afford them on their own. They have to go into co-productions which inevitably which they wouldn’t have done previously. Tom added “it’s somewhat difficult for them in terms of major super-premium scripted dramas like this because most broadcasters have to provide 24 hours of entertainment across a different number of channels whereas streaming services can concentrate their not inconsiderable spend on particular projects. At the moment it does tend to be these big one-offs but it is going to become more and more difficult for traditional broadcasters to win those auction-type arrangements for major productions". According to Tom, the deal is a major win for Amazon. "In terms of video, Amazon has had a bad few months and they need a win. Amazon has been worried that they haven’t had a hit in the way Netflix has with Stranger Things. So they’ve gone back to the easiest way of acquiring a hit, which is acquiring IP which has shown to be very successful in the past. A lot of people were in the market for this so Amazon has gone above and beyond to ensure they’ve got what they think will be a guaranteed winner."

The Times 13 November 2017

Enders Analysis was quoted in an article on the expensive competition for entertainment content. In the past 12 months, Netflix has spent $8.5 billion on programming for its subscription video-on-demand service. With consumers increasingly watching movies and television via on-demand streaming, the Netflix subscription model is gaining on traditional models of advertising-funded viewing. As a result, Netflix and other streaming services have proved themselves nimbler and more willing to take risks than Hollywood studios. They also have several advantages over traditional television incumbents, not least the fact that in the UK they are not bound by regulations such as the 9pm watershed (only a quarter of Netflix’s original content would be allowed before the UK watershed). They also have such deep pockets that the team at Enders Analysis believes it is doubtful whether in a decade’s time Britain’s public service broadcasters will still be able to compete.

CNC News 10 November 2017

Chris Hayes was quoted in an article on royalties from thousands of song classics tucked away tax-free. Musical memories are offshore for the same reason as other assets — tax advantages. Skipping taxes helps increase earnings from intellectual property — patents, copyrights, trademarks and trade secrets — as well as other holdings. Music publishing rights have retained value despite turmoil in the music industry that has eroded the worth of related rights, creating steep declines in royalties for sales of digital music or albums. If the owner plays it right, music catalogues can be real money-makers, and the steady income that can be drawn from a music catalogue is a lure for institutional investors. Chris said "there is a burgeoning market for music catalogues among institutional investors who are looking for fairly reliable revenues in the future"

the Guardian 10 November 2017

Alice Enders was quoted in an article on Rupert Murdoch’s relationship with his younger son James, which is being called into question in the aftermath of the revelation that his company 21st Century Fox was considering selling its film studio and stake in Sky to rival Disney. It also raises the prospect that Rupert has become disillusioned with James’s strategy at Fox and the Sky deal. Alice said that if the Sky deal collapsed, in the face of a lengthy regulatory process and political opposition, then it would be seen as a failure for James. She added “we think that a lot of things could be on the table if the deal does not go through. If it doesn’t go through it would compromise the position and the strategy James has taken, it would be a failure.”

Twipe 9 November 2017

Douglas McCabe was quoted in an article on how The Guardian plans to reach one million paying members. The perennial question of how to fund quality journalism has seen a few new answers in recent memory, with membership programs as one potentially successful solution. The Guardian hopes to tap into this, with their membership plan as a core component of their goal to more than double revenue generated from readers to £68 million. Douglas said “at some level consumers are increasingly aware of the value of quality news provision by trusted brands due to an acceleration in the momentum of national and international political and economic developments. Greater uncertainty has pushed people to engage and commit”.

The Times 8 November 2017

Claire Enders was quoted in an article on the change of viewing habits, as the increasing appeal of programmes available from streaming services is shaking up the world of television. For decades, the bosses at Hollywood studio giants, including Disney, had controlled the biggest stars and had signed the fattest pay cheques in the global entertainment business. Suddenly, it was upstarts such as Netflix and Amazon that seemed to be in charge, hiring the best talent, drawing hundreds of millions of subscribers to their booming internet streaming services and making the industry dance to their tune. With consumers increasingly choosing to watch movies and television shows via on-demand streaming, often on smartphone or tablet, traditional models of advertising-funded viewing are being hit hard, forcing the industry to come up with new strategies to compete. Claire believes that Netflix is trying to cut out the studios and that this is forcing many to consider defensive mergers and acquisitions. Everybody, she said, “is thinking about how to circle the wagons”.

The Drum 8 November 2017

Douglas McCabe was quoted in an article on how Jeff Bezos built a tech business within the Washington Post. Over the past four years the Post has become both a technology business and a journalism institution, a mix it believes is essential to succeed in media in the future. Douglas believes Bezos has done a good job of evading the potential downsides of a tech entrepreneur buying an impartial news organisation. He said “the downsides could have included: interference; technology innovation at the expense of investment in journalism; an Amazon strategy shoehorned into the publishing business; too much distance, that is, money without intelligence. None of these outcomes have emerged because Bezos has evidently not interfered with the Post’s content at all. He has applied a strategic framework and some tactical elements to generate a means of investing more in journalism in the short and medium term”.